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04 January 1998

Pithampur small enterprises tell a tale of untapped potential 

Santosh Tiwary  
PITHAMPUR (MP): Conceived to be the Detroit of India by Madhya Pradesh stalwart Arjun Singh during his tenure as the chief minister of the state, the Pithampur industrial area has no way come near his dream. About 30 km from Indore, the industrial area is languishing even after the establishment of manufacturing units by five major auto giants. Nevertheless, the industrial area has furthered business activities in the surrounding areas. And, minus the bottlenecks, Pithampur still has the potential to live up to its dream image.

The moot point remains whether the failure of industrialisation to promote ancillarisation in Pithampur can be attributed to the lack of infrastructure or local enterprise.

According to Gautam Kothari, president of the Pithampur Audhyogik Sangathan (PAS), of the 300 small units established after the inception of the industrial area in 1983, about 130 have closed down though some of them have been resold. A few pockets of the industrial area look like a graveyard of sick units.

Entrepreneurs blame it on the lack of infrastructure. Power problem has forced closure of many steel rolling mills in the recent past. "It is very hard for the small units to cope with the poor power situation here," says Kothari, "and poor road condition too hinders the industrial activity.""The period between 1986-88 was the peak time for Pithampur," says Kothari.

But good times were not there to stay. In 1988, the Central government discontinued subsidy which hit the small units. There was a simultaneous increase in the cases of delayed payments. Many units closed down and very few new ones came up.

The automobile giants have proved to be no saviours. According to Naresh Randhar, honorary secretary-in-chief of the PAS, the basic reason behind ancillarisation not picking up is lack of interest of the big auto companies in the local units. "Probably they find that the area lacks in environment and infrastructure," he adds.

Scarcity of skilled manpower and inferior quality keep the auto giants away from locally made components. Consequently, local vendors can never come up and the big units have their own vendors with no binding on them to develop local vendors. Randhar complains that the state government has also not done its bit to promote ancillarisation.

Further, all the skilled and non-skilled workers in the area have been absorbed by the big units. Small units have to depend on the on-the-job training for sourcing manpower.

Interestingly, the workers often leave small units for bigger units after receiving training even on a lower salary. According to Randhar, about 50 per cent of the skilled labour in Pithampur have been developed by the small units. "Retaining skilled labour after training is very difficult," says Subhash B Chuttar of Ghatiman Auto Pvt Ltd.

However, Chuttar, who has a unit in Pune also, does not find the situation in Pithampur utterly discouraging. "I have been seeing Pune since 1975. Considering the fact that Pithampur has seen only 10 years of industrial activity, it has developed fast in comparison to Pune. Even roads are much better here. Pithampur is an advancement in real terms."

Randhar also feels that the economic milieu of the area has certainly gained from the development of Pithampur. "Infrastructure growth, employment generation and growth of business in the area are some of the positive aspects of Pithampur." Moreover, Pithampur has always received special attention from every corner, he feels. "People want to look after Pithampur, as it is some sort of a metropolis. Companies from various states have come here," says Randhar.

Chuttar too is of the view that apart from electricity, there is no major problem in Pithampur. "If the people are not skilled here then it is our responsibility to educate them." "The main reason for sickness in Pithampur is lack of entrepreneurial culture. Trading culture is pre-dominant here. People take loans and benefits and make their units sick," says Chuttar. Nevertheless, Chuttar is optimistic. "With time, ancillarisation will pick up surely in Pithampur," he says. Not only Chuttar but there are others like L C Tolani of Pragya Hydro Equipments, who feels that they can grow in Pithampur. The company has developed expertise in hydraulic systems, hydraulic handling equipment and industrial equipment. "We have full-fledged heavy engineering unit with well experienced team of qualified engineers. And we have successfully developed equipment which have been well received by customers. In future, we are planning to expand our activities in various areas," says Tolani.

Chief Minister Digvijay Singh told FE Enterprise that the industrial area is doing well. "As far as the power situation is concerned, we are working on nine power projects. And, new captive power policy will be declared shortly," he said.

Though there are mixed feelings about the growth of Pithampur, there is unanimity about it being the cherished industrial area of the state. Whether it will be able to fulfil the dream or not is a question to be answered through collective wisdom -- of the state government and entrepreneurs.

Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.



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